Bloomberg News

RIM Releasing BlackBerry on Six Continents to Reach Faithful

September 25, 2012

RIM Releasing BlackBerry on Six Continents to Reach Faithful

Research in Motion Ltd.’s share of the global smartphone market, which it once dominated, tumbled to 4.8 percent in the second quarter from 12 percent a year earlier, according to research firm IDC. Photographer: Nelson Ching/Bloomberg

Research In Motion Ltd. (RIM) plans to release its new BlackBerry 10 smartphone lineup on six continents in the first quarter, seeking to capitalize on the company’s lingering strength in overseas markets.

RIM has already met with 30 carriers to show them the BB10 operating system and the response has been very positive, Chief Marketing Officer Frank Boulben said in an interview from the BlackBerry 10 Jam conference in San Jose, California.

“We’ve been hearing things like, ‘unique, revolutionary, really slick,’” said Boulben, who had just returned from a trip that included stops in Singapore, Mumbai and Johannesburg -- some of the markets where the BlackBerry remains popular.

RIM is counting on overseas customers to offset shrinking demand in North America, where the BlackBerry has lost ground (RIMM:US) to Apple Inc. (AAPL:US)’s iPhone and Google Inc. (GOOG:US)’s Android operating system. Even with analysts projecting (RIMM:US) a 45 percent decline in RIM’s sales this fiscal year, the company says its installed base of customers continues to grow. The BlackBerry now has 80 million subscribers, up from 78 million, Boulben said.

RIM shares (RIMM:US) climbed 4.7 percent to $6.60 at 4 p.m. in New York. The gain pared the stock’s loss this year to 54 percent.

‘Clear Shot’

The challenge for RIM is persuading carriers, software developers and U.S. customers to embrace BlackBerry 10, an operating system that was delayed at least twice. The company is touting the software’s ability to run multiple programs at once, making it easier for business customers to be productive, part of its bid to win back market share from Apple and Google.

RIM’s share of the global smartphone market, which it once dominated, tumbled to 4.8 percent in the second quarter from 12 percent a year earlier, according to research firm IDC. RIM, based in Waterloo, Ontario, reports its latest quarterly results in two days.

Despite those losses, RIM has a “clear shot” at becoming the world’s third major operating system, behind Apple’s iOS and Android, Chief Executive Officer Thorsten Heins told journalists at a briefing today.

For now, RIM is retrenching. The company is cutting 5,000 jobs as part of a drive to save $1 billion this fiscal year. RIM has made “good progress” on the plan and is about 40 percent to 50 percent toward its cost-cutting goal, Heins said.

No Ecosystem?

Ehud Gelblum, an analyst with Morgan Stanley (MS:US) in New York, said his biggest concern is that BB10 doesn’t have the support of developers who build the news, games and music applications that have helped drive the success of the iPhone and Android.

“A thriving app ecosystem is vital,” Gelblum, who rates RIM the equivalent of a sell, said in a research note yesterday. “We are finding literally zero support for RIM’s new BB10 OS, following our latest developer checks, raising the possibility that when RIM finally throws its big BB10 launch party, nobody shows up.”

Boulben, a Frenchman who joined RIM from LightSquared Inc. in May, disputes that view. The BlackBerry 10 Jam developer conferences have been sold out, he said, including this week’s San Jose event.

RIM has already given out 6,000 BB10 prototypes to developers to help them build apps, and it’s making more, he said. There are also about 25,000 apps available for the BlackBerry PlayBook tablet, which runs on software similar to BB10. Most of those should work on the new phones, RIM has said.

Facebook, Twitter

BB10 will work with apps from the top social-networking companies, including Facebook Inc. (FB:US), Twitter Inc., LinkedIn Corp. (LNKD:US) and Foursquare Labs Inc., Alec Saunders, vice president of developer relations, told an audience in a presentation to developers in San Jose.

Heins demonstrated some of BB10’s new features, including BlackBerry Balance, which lets users flip between work and personal screen displays, and a retro-orange alarm clock that you set by rotating your finger around the dial.

RIM is planning to have a splashy event early next year to introduce the BB10 phones, which will include touch-screen versions and more traditional qwerty keyboard models. Before that, RIM will have a “progressive reveal” of BB10’s strengths with corporate information-technology chiefs, technology experts and media, Boulben said.

The fact that BlackBerry subscriber numbers are still rising, helped by growth in places like India and Africa, counters the claim that RIM is in decline, Boulben said.

“That is a good response to everybody that has a negative outlook,” he said.

Asian Demand

Boulben has been crisscrossing the globe with Heins, talking up the new platform. Heins said he’s been impressed by consumer enthusiasm for BlackBerry in Asia in particular.

“I’ve just returned from Southeast Asia, and BlackBerry adoption is outpacing smartphone growth in some Asian markets,” he said at the event.

Testing with some carriers will begin next month, Heins said. BB10’s arrival is “a few short months away,” he said.

The exact timing of BB10 phones going on sale will be up to carriers in the Americas, Europe, Australia, Asia and Africa, Boulben said. It will hinge on how long they take to test the handsets.

“Lab entry at some carriers can take as little as six to nine weeks and for some carriers, 16 to 20 weeks,” he said. “That explains with a carrier whether it will be January or February.”

By the end of the first quarter, BB10 devices should probably be available in about two dozen markets, he said. Whatever the pace of the rollout, BB10 should deliver the first really new smartphone operating system since Apple’s first iPhone in 2007, Boulben said.

“In the last five years there hasn’t a groundbreaking new experience and we believe in this one you have all the ingredients,” he said.

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

Research in Motion Ltd.’s share of the global smartphone market, which it once dominated, tumbled to 4.8 percent in the second quarter from 12 percent a year earlier, according to research firm IDC. Photographer: Nelson Ching/Bloomberg Research In Motion Ltd. is counting on overseas customers to offset shrinking demand in North America, where the BlackBerry has lost ground to Apple Inc.’s iPhone and Google Inc.’s Android operating system. Photographer: Brent Lewin/Bloomberg Sept. 25 (Bloomberg) -- Jon Erlichman discusses the new Blackberry 10. He speaks on Bloomberg Television's "Street Smart." (Source: Bloomberg)

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